Would it surprise you to learn that the so-far 5 percent selloff in the Dow Industrials has done almost no technical damage to the hourly chart, let alone the daily?  Check out the graph below if you don’t believe it. As you can see, at the nadir of yesterday’s emetic 450-point plunge, the Indoos had yet to breach even a single important prior low. For the decline to register as something more than a mere blip on our Hidden Pivot radar, it would have to exceed not just one prior low, but two -- meaning the 13251 low from June 8, then the 13211 bottom on May 10.

(Click on chart to enlarge)

That’s the good news. The bad news is that this market could take out both of those lows within ten minutes of this morning’s opening bell; moreover, they look half-primed to do so. As my friend Garret Jones pointed out yesterday in a Special Alert (click here  to request a free copy), although stocks were quite heavily oversold by Thursday’s close, much of the selling occurred with the short-term trading index barely above 1.0. What this suggests is that, although the stock market appeared to be unraveling, investors remained largely complacent.  Garrett notes that on a day when declines outnumbered advances by 11 to 1, we should have expected to see the TRIN at 3.0 or even higher. Whether the relatively low TRIN readings were caused by the Plunge Protection Team or by investors who simply can’t be spooked,” he adds, “more selling could happen if it really wants to.”

Dear Subscribers…

I’ll be in Margaritaville from July 30-August 7, attempting to exist without a laptop or cell phone for the first time in more than four years. Your subscription will automatically be extended by a week in my absence, but be prepared to hit the ground running when I return, especially if the stock market’s troublesome behavior continues.

While I’m sipping Mojitos under the coconuts,  I want to give you a chance to earn some free subscription time on me. I’ll provide details in this weekend’s commentary, so stay tuned!